Online Retail Me Yes: E-Commerce and Employment during the COVID-19 Pandemic

The relationship between E-commerce and employment was largely ignored pre-COVID. This is likely because whether a worker's firm engages in E-commerce or not may not have any effect on an employee's likelihood of retaining their job. However, when COVID-19 hit the world economy in early 2020, a major determinant of whether a business stayed open for in-person shopping or not was whether it was able to continue selling online. Using data on the proportion of firms in a metropolitan area that engage in E-commerce from the Annual Survey of Entrepreneurs and CPS monthly data on employment, I run both a continuous difference-in-differences model and event study specification to see the effect a metropolitan area's connection to E-commerce had on employment in that city. Both models show that workers in metros with more E-commerce are no more likely to be employed prior to COVID, but are much more likely to retain their job once COVID hits. Results suggest that investing public or private money into moving firms to online platforms would make metro areas more resilient to the next pandemic.